Bank of Canada Lowers Key Interest Rate

First Rate Cut Since March 2020

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The Bank of Canada has lowered its key interest rate to 4.75 per cent, marking the bank's first rate cut since March 2020. The decision was widely expected by economists and comes as Canada's economy continues to struggle with the effects of the COVID-19 pandemic.

In a statement, the Bank of Canada said that the rate cut is intended to "support economic growth and keep inflation low." The bank noted that the Canadian economy has been "performing below potential" in recent months and that the global economic outlook remains uncertain.

The Bank of Canada's decision is likely to be welcomed by businesses and consumers. Lower interest rates make it cheaper to borrow money, which can boost spending and investment. However, the rate cut could also lead to higher inflation, as lower interest rates can make it more expensive to save money.

Conclusion

The Bank of Canada's decision to lower its key interest rate is a significant development that could have a major impact on the Canadian economy. It remains to be seen whether the rate cut will be enough to boost growth and keep inflation low. However, the decision is a clear sign that the Bank of Canada is committed to supporting the Canadian economy during these challenging times.